Karman initiated with a Sell at BWS Financial

BWS Financial initiated coverage of Karman (KRMN) with a Sell rating and $37 price target Karman is a supplier in an aerospace and defense sector that has benefited from growth in demand for hypersonic and tactical missiles, the analyst tells investors in a research note. The firm says the company uses “aggressive accounting that could give the impression of significant earnings, but such earnings lack free cash flow.” BWS says the company’s organic growth in backlog is slowing. Karman’s “levered” balance sheet and lack of free cash flow are headwinds to the stock’s “very high valuation,” contends BWS.